The House of Representatives has approved a bill that would ban private tax collections, but the bill's prospects remain uncertain in the Senate.
The White House has threatened to veto the legislation, insisting that the private tax collectors help bring in revenue. "Terminating this program would result in a loss of significant revenue over the next 10 years," said the White House in a statement.
The private tax collection program began in 2004, but has met with controversy, with opponents charging that it could lead to abuses and unnecessary expenses. The House passed the bill 232-173 and the Senate will take up the legislation as part of a spending bill.
But Sen. Chuck Grassley, R-Iowa, ranking member of the Senate Finance Committee, has opposed the measure. "This bill is dead on arrival in the Senate, as far as I'm concerned," he said in a statement. "It attempts to stop a program that's brand new, yet already working. It's helping to close the tax gap, which key members of the other party say is a priority."
The program has brought in $32 million since last year, with $5.5 million going to the private collection agencies, according to the Associated Press.
The National Treasury Employees Union hailed the passage of the bill by the House. "The Tax Collection Responsibility Act of 2007 is the most definitive declaration yet of the clear, strong and bipartisan opposition in Congress and among taxpayers to the IRS's use of private debt collectors and a major step forward in stopping this misguided, costly program," said union president Colleen Kelley in a statement.
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